The Gravity gun is blurry in this scene due to the depth of field effect. Since the view is focused in the distance, the nearby items are slightly blurred.

The effect is dynamic, however. If you look at something nearby (i.e. point your mouse at a nearby object), then the gun and nearby area are clear, and distant areas are blurred. Check out some of the other images in this gallery to see this effect more clearly.

When the mod is released, you will also be able to disable this individual effect if you prefer, by editing an .ini file.